Cabinet Approves Incentive Schemes Worth Rs 76,000 Crore For Semiconductors

New Delhi: In a bid to promote semiconductors and display manufacturing ecosystem in India, the Union Cabinet on Wednesday cleared incentive scheme worth Rs 76,000 crore.

Under this initiative, the government plans to set up over 20 semiconductor design, components manufacturing, and display fabrication (fab) units in India over the six years.

During the cabinet briefing, Union Minister Anurag Thakur said that the decision has been taken under the Ministry of Electronics and Information and Technology, which further strengthens the thinking of self-reliant India.

''An ambitious plan has been approved to establish a complete ecosystem of semiconductor and display manufacturing in India. 76 thousand crore rupees will be spent under this scheme in 6 years. Which will further strengthen the thinking of self-reliant India,'' he added.

Giving detailed information about this scheme, Union Railway Minister Ashwini Vaishnav said, "In the era we are in today, electronics have a very important role in every area of our life, from morning till evening. The most important thing behind electronics is the semiconductor chip''.

''Today our Prime Minister Narendra Modi has taken a historic decision, so that the entire semiconductor ecosystem in the country i.e. semiconductor design, fabrication, packaging, testing etc. can be developed. Under this decision, the central government will invest Rs 76 thousand crore,'' he added.

He further added, "If we look at the journey of electronics manufacturing in the last 7 years, our beginning was very small, but today we have reached $ 75 billion in electronics manufacturing. The pace at which we are running, this same electronic manufacturing will reach $ 300 billion (Rs 20 lakh crore) in the next 6 years''.

"If we look at the electronic manufacturing ecosystem, there are 4 important things that happen in the entire value chain before the final assembly. The most important of these is the semiconductor chip, the second is all the other components, the third is the packaging etc. and finally the fourth is the mechanism of the supply chain,'' he added.

He also said that there has been so much progress on these four things in the last 7 years that the world's largest mobile phone manufacturing unit is in India.

Notably, the move comes at a time when the industry in the world is suffering due to shortage of semiconductor which is a key component in all types of electronic devices.

The scheme will include provision for 25 per cent incentives on capital expenditure for establishing unit of compound semiconductor wafer fabrication (Fab), assembly, testing, and packaging facility. The scheme will also include incentives for startups towards the design development of semiconductors. The proposed scheme envisioned investments of Rs. 1.7 lakh crore by the industry.

With this scheme, the government is mulling to attract the top semiconductor manufacturers such as Mediatek, Intel, Qualcom, Samsung and Texas Instruments.

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